Correspondence with Middlebrook around Lundin Links hotel and Kapital Residential: FOI review

Information requested

Copies of the correspondence between the Scottish Government and Middlebrook regarding

• Lundin Links Hotel/Kapital Residential
• between 23 June 2022 and 5 September 2022 (inclusive)

The valuation report of Lundin Links Hotel carried out by Chartered Surveyors DM Hall I apologise for the delay in responding, it has taken substantially longer to respond to you than expected due to the complexities of this case.

You set out your request for a review on the decision to withhold the valuation of the former Lundin Links Hotel and also the decision to withhold correspondence:

1. In respect of the decision to withhold the valuation report, you asked that the issue is looked at on the following 2 points:

• The effect of the passage of time on any prejudice – The valuation was considered before Scottish Government entered into agreement to lend, meaning the valuation at the latest must have been produced prior to the 23 July 2020. Meaning over 2 years of market change has taken place since this valuation.
• Material change to what was valued – The value of the site will not be representative of the value of the site being sold.

You also asked that consideration is given to whether some of the information in this report can be disclosed, for example the date of valuation, and the total valuation (without any contextual information which would allow this figure to be broken down into its constituent parts).

2. You asked for additional information; confirmation on whether the liquidator’s views have been sought on the disclosure of the valuation (and their view).
3. You also asked that the decision to withhold correspondence be reconsidered.

Response

I have concluded that a new decision should be substituted.

1. Valuation report

With regard to the valuation of the Lundin Links Hotel, I would advise that the document held by the Scottish Government was prepared in 2017 by DM Hall for a separate company, neither Kapital Residential Limited nor the Scottish Government. I have concluded that the information should be withheld under the exemption set out in section 30(c) of FOISA (prejudice to effective conduct of public affairs). The release of that information is likely to inhibit the ability of Scottish Government and its agents to make decisions for the purposes of reaching conclusions on its approach to property transactions – including where this involves public funds. The views of DM Hall have been obtained and taken into account in coming to this decision.

This exemption is subject to the ‘public interest test’. Taking account of all the circumstances of this case, I have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. On balance, I have found that the public interest lies in favour of upholding the exemption. I recognise that there is some public interest in release of information as taxpayers’ money has been used to provide a loan secured on the former Lundin Links Hotel. However, I consider that this is outweighed by the public interest in holding information which informs Scottish Government actions and allows us to make decisions in the best interests of the Scottish Government and release of the information substantially prejudices our ability to do that.

2. Views of the liquidator

I would confirm that the liquidator’s views have been sought on the release of the 2017 document and they advised that they have no interest in the company for whom the opinion of value was prepared.

3. Correspondence

I have concluded that further correspondence between the Scottish Government and Middlebrooks regarding the Lundin Links Hotel and Kapital Residential Limited between 23 June 2022 and 5 September 2022 (inclusive) should be released. The original response advised that exemption 36 (confidentiality) had been applied and as a result the correspondence between advisers acting on behalf of both the Scottish Government and Middlebrooks was not provided. I have considered this information and I have attached with this letter, correspondence between MacRoberts, and Middlebrooks, which is within scope of your original request.

An exemption under section 30(c) (prejudice to effective conduct of public affairs) applies to some of the information you have requested and where that is the case information has been withheld. The release of that information is likely to inhibit the ability of Scottish Government and its agents to make decisions for the purposes of reaching conclusions on its approach to property transactions and the legal process of liquidation – including where this involves public funds.

This exemption is subject to the ‘public interest test’. Taking account of all the circumstances of this case, I have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. On balance, I have found that the public interest lies in favour of upholding the exemption. I recognise that there is some public interest in release of information as taxpayers’ money has been used to provide a loan secured on the former Lundin Links Hotel. However, I consider that this is outweighed by the public interest in holding information which informs Scottish Government actions and allows us to make decisions in the best interests of the Scottish Government and release would substantially prejudice our ability to do that.

An exemption under section 38(1)(b) (personal information) of FOISA applies to some of the information requested because it is personal data of a third party, i.e., the names and contact details of individuals and disclosing it would contravene the data protection principles in Article 5(1) of the General Data Protection Regulation and in section 34(1) of the Data Protection Act 2018. This exemption is not subject to the ‘public interest test’, so we are not required to consider if the public interest in disclosing the information outweighs the public interest in applying the exemption.

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FOI - 202200335596 - Correspondence 1 of 2

File type

31 page PDF

File size

536.4 kB

FOI - 202200335596 - Correspondence 2 of 2

File type

44 page PDF

File size

1.2 MB